Have one year to build credit and don't know what we're doing

For just about anything you want to get off your chest about credit cards.
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JamesMS
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Postby JamesMS » Fri Apr 17, 2015 7:51 am

Based on everything that you have been stating, I totally agree with MemberSince99 on this. 1 year is probably going to be out of the question. Buying a house is not something that just needs to be rushed, there is a lot to take into consideration. Credit and finances are IMO the main factors. Continue to build your and your husband's credit, that is going to take a little bit of time to get it where it should be.

When a husband and wife buy a house, both names can go on the title and on the loan. I am not sure what the situation was with you and your ex, but that is not normal. That being said, the lender should look at both incomes as y'all are married.

Job history is one of the factors that lenders look at when people try to get mortgage, in other words, try and stay at your current job. A lot of moving around can be a red flag as it shows instability.
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mrsjperez
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Postby mrsjperez » Fri Apr 17, 2015 4:48 pm

One year is absolutely the max. We have family coming in a year and a half and we're sponsoring then so we have to show a stable environment. I know we can get there. It's just one big headache getting off the ground. I'm really unhappy with BofA. I received my credit card in the mail yesterday. It's not my capital one. It's BofA card. I went to the bank and the woman said there must have been some sort of miscommunication. She thought we wanted their bank card that we were pre approved for. When I shed why she said it showed on our credit we were approved for capital one and the approval letter was probably in the mail she said she thought I was talking about their card. I would never apply with their card as I've been less than satisfied with their service. Same with my husband. Now we both have BofA cards we couldn't care less about. I know beggars can't be choosers but that clearly shows the woman didn't listen to a word I said. We're going tomorrow to apply for kohls and Sam's cards as his other 2 cards since we have to have 3. Should we apply together or just focus solely on him? Our broker says that since its just him applying for the loan that mine isn't important. I've never wanted credit cards and dont care much except to get our house. He's pretty mad he needs 3 cards to get through this.I'm assuming she's recommending 3 to speed the process.

JamesMS
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Postby JamesMS » Fri Apr 17, 2015 5:15 pm

It's not that 3 cards will speed up the process. In most cases, someone that has multiple lines of credit (3 or more) show that lenders are willing to extend credit to someone. Just remember to use the card(s) wisely, do not max out and do not pay late. Where did you apply for the card at, was it online through Capital One or at Bank of America? If you applied for the card at BOA, then I am not surprised that it's a BOA credit card. You would not be able to apply for a Cap 1 card at BOA. My other question in regards to this is you say it is a bank card. Do you mean Debit card or Credit card? When people say bank card, that usually means debit card, and if that is the case it does you no good.

I am still a little confused when you keep saying that it is only your husband that will be on the mortgage. Are you wanting or not wanting to be on it? If you want to be on it, then you should and both of your information will be used when applying to purchase the house. What you have been told, at least from my understanding of it, is completely untrue and/or very confusing.

You can apply for credit wherever you feel like, but if it were me, if you want a store card, only get 1 and get 1 more credit card. You can easily go online to different websites (Capital One, Citi, Discover, Amex, Chase, US Bank, etc...) and see if you are pre-qualified for any of their credit cards, then if you are, you are more likely to be approved.
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mrsjperez
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Postby mrsjperez » Sun Apr 19, 2015 8:21 pm

I don't understand why it takes so long. Of course I don't understand where the score starts. You start from 0 and every month your score goes up based on your credit handling? Is that why it takes more than a year? They raise your score very slowly no matter how perfect you are in using it? I asked the cousin who got his house in less than a year and he said he only used his card maybe 3 times in 4 months before he started trying to buy his house. Does that mean his score was going up just for the time in the card even though he wasn't using it? Also, any recommendations on where is a guaranteed yes for card approval. We've tried Sam's,kohls,belks, Wal-Mart and all denied us credit. Haven't found anywhere online that we're pre approved for. We don't want to get a card somewhere we're not going to use unless just forced to buy something just to return it because we dint actually want it. How do returns work with a credit card? I'm assuming it goes on your card again but what does that do to your score?

daniel2304
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Postby daniel2304 » Sun Apr 19, 2015 8:46 pm

I think you should spend more time to read and research more about credit score before going to buy a house. Your last post shows that you know nothing about credit score and how it works. Compared the house and some credit cards, it is like an elephant and an ant. You need to handle credit cards, credit score before handle the house, otherwise, you're depend on other people for your most major purchase of your life. And other people, they might NOT work in your favor.

And stop going out apply credit cards. It's not helping anymore. Each time you apply, there will be a pull from your credit report. Lenders would automatically deny when many credit requests were made.
All my posts are my opinions. All my posts mentioned "you" are merely for discussion-purpose only. No advice is given in any post at any time. It is also impossible for me to put effort to verify every statement that anyone has given.

JamesMS
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Postby JamesMS » Sun Apr 19, 2015 9:02 pm

Credit starts being built from the day that a Trade Line is listed on your credit reports. Example, I have a credit card from 2008, the day it started reporting I started building credit. Just because you don't use it all of the time doesn't mean it is not helping your credit. Your credit report and score is based on multiple factors:

35% - Payment History
30% - Amounts Owed (Utilization)
15% - Length of Credit History (Average Age of Accounts)
10% - Types of Credit
10% - New Credit (Inquiries)

All of the factors above determine your credit. There are "NO GUARANTEES" in regards to being approved for credit, in most cases. Your cousin might have been able to buy a house within 1 year from when they started the process, it only took me 3 months from pre-approval to closing. I would almost bet that your cousin has been building credit for at least a couple of years. Ask him/her how long they have had that credit card. Also, has your cousin had any other lines of credit in the past? There are so many factors other than your cousin decided to buy a house one day and it took less than a year.

In regards to the first couple of statements that you made on your previous post, building credit takes time, why, because it just does. When you are talking about purchasing a $50k to $300K or above house, you have to show the lender that that risk is worth it to the bank. If it were that easy, anyone could just walk into a bank or apply for a credit card and be approved for whatever amount the consumer requested.

I do not mean for this to sound mean in any way so please do not take it like that, I just don't know any other way of making this statement: Seeing that you have only been approved for 1 credit card (recently) and have not made any payments on this account, this account probably isn't even showing on your reports yet, you can't expect a bank to give you a (thousands) of dollar loan to purchase a house yet.

Be patient with the process and work on it, it takes time. Do what you are supposed to with the current card that you have. Wait until that card starts reporting on your credit, make a couple of payments, and then try to obtain another credit card. By that time your score should start increasing. Before you know it, you will be able to get the house.
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takeshi
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Postby takeshi » Mon Apr 20, 2015 9:04 am

mrsjperez wrote:I can't log into credit karma or annual credit report or any of those sites because there's different names and addresses with the 3 agencies and I don't know how to find out what the have or how to change them.

You need to contact each CRA separately and sort it out with each of them. The web site of each CRA should have contact info.

mrsjperez wrote:Never thought not being in debt and not having to use cards and paying everything cash on time would actually screw us over.

Don't conflate debt and credit. You can build credit without debt. Treat your credit cards as cash. You're not being screwed over. You can't build credit without using credit. You didn't understand and you didn't build your credit prior to this point. We all have to learn and work on it at some point.

That said, for things like mortgages, auto and student loans you do have to get into debt but that debt is assessed differently than debt in revolving accounts.

mrsjperez wrote:Turns out experian had my maiden name(been married 2 times so not sure how they only have that) and they have an address I recently found out is my ex mother in laws house that I have never lived at.

Generally speaking the CRA's have info that creditors report to them. The CRA's don't automatically update your name just because you got married. A creditor has to report the name change to them. Not sure how they got that address but, again, it would have been via a creditor.

mrsjperez wrote:I don't understand why it takes so long.

You need to consider it from a creditor's perspective. The consumer's track record is the best indication of the consumer's future even though it does not guarantee anything.

Who would you be more willing to lend money to? A person who has never borrowed money from you or anyone or a person who has demonstrated over many years that the person can reliably borrow money and repay it in full and on time?

Building credit takes time. You have to be prepared to be in this for the long haul. There are no shortcuts. The length of one's credit history and, more importantly, the Average Age of Accounts for an individual is a reflection of how long one has been using credit as well as how often one has been opening new accounts (considered a risk factor). Generally speaking, the longer the AAoA the better.

mrsjperez wrote:You start from 0 and every month your score goes up based on your credit handling?

Not exactly. You can't assume that you will constantly have an increasing score. Your credit is assessed on how a number of different factors all add up for you.
http://www.myfico.com/crediteducation/whatsinyourscore.aspx

mrsjperez wrote:Also, any recommendations on where is a guaranteed yes for card approval.

There's no such thing. Approvals, limits and APR's are all based on one's credit. The only guaranteed cards are secured cards that do not require a credit check. That said, some credit unions and store cards may have easier approval criteria.

Given what you've stated it sounds like you need to hold off on the applications. If you don't have much credit then adding a number of new accounts will be seen as risky behavior. You should also consider moving back the mortgage. I know what you've said above but, again, building credit takes time. 1 year isn't a significant amount of time in the credit world.

mrsjperez wrote:How do returns work with a credit card? I'm assuming it goes on your card again but what does that do to your score?

Credits for returns are applied against your balance. Individual transactions are not factored into your scores. Your cards typically report once a month and the reported balance is what matters. Actually it's more the utilization (balance/limit) that matters.


You have a lot to learn but keep in mind that none of us started out knowing everything and it took us time to get where we are now. Use this and other sites to educate yourself on how your credit is assessed so you're better equipped to make the decisions and definitely ask questions.

JamesMS wrote:Just remember to use the card(s) wisely, do not max out and do not pay late.

Definitely do not pay late. 100% of payments must be on time. Not 99%. Not 99.99999%. 100%.

"Do not max out" is a very low bar. Do not allow more than 30% to report. You can manage reported balances by paying down the card before the date it reports. Most cards report on statement date but you need to confirm specifically when your cards report. You can ask your creditors or look at your credit reports for the last report date.

You do not need to carry a balance for scoring purposes. Pay in full.

JamesMS
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Postby JamesMS » Mon Apr 20, 2015 9:34 am

Yes, when I made the statement "Do not max out", it was a very low bar and I probably should have gone into further detail. I was talking about it like how I use my cards, make charges this week, pay it the following Monday. I meant to state do not go over your limits and do not let it show more than 30% to report, under 10% in preferred.
Main Cards:
Amex BCE
Amex Everyday
Bank of America Cash Rewards
Chase Freedom
Capital One Quicksilver
Citi Thank You Preferred

Spark Cash Back (Business), Amex Plum (Business)

Vermonster
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Postby Vermonster » Mon Apr 20, 2015 9:59 pm

I really think mrsjperez really needs to invest some money in someone that can sit down face to face and go over every little detail and answer every question. Forums are a great way to get general information, but there area a lot of specific details that many of us can not answer with 100% certainty.
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Postby 2cents » Tue Apr 21, 2015 6:44 am

Alternative credit may be referring to a co-signer



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